V.I. Superior Court Judge Douglas Brady has denied the V.I. Housing Finance Authority’s motion to dismiss a whistleblower complaint by former chief operating officer Stephanie Berry and ordered that both parties “meet and confer” within 45 days to consider, among other matters, the possibility of a prompt settlement.
Berry alleged in her lawsuit filed Dec. 1 that the authority stands to “lose millions of dollars through recapturing of federal funds due to noncompliance with policies and procedures,” and that projects funded by the Federal Emergency Management Agency are at a standstill because of inaction by VIHFA leadership.
After expressing concerns internally, Berry claimed that VIHFA Executive Director Eugene Jones Jr. cautioned that “if she kept putting things in writing, it would be to [her] detriment.” The suit also names Chief Disaster Recovery Officer Dayna Clendinen, who served as the authority’s interim executive director for much of Berry’s tenure.
Berry, who was hired by the VIHFA in January 2023, was subsequently fired in October.
In addition to claiming a violation of the Whistleblower Protection Act, Berry claims breach of contract, defamation, and that Jones and Clendinen tortiously interfered with her employment at VIHFA.
The VIHFA responded forcefully to Berry’s allegations in January through a combined motion to dismiss and memorandum of law, saying that she was a disgruntled employee and that her lawsuit is nothing more than retribution for being fired and lacks the specificity to move forward.
In an eight-page order filed July 23, Brady disagreed, noting the court is obligated to view a plaintiff’s allegations liberally in the light most favorable to them.
Considering each count separately, Brady ruled that at the “pleading stage of this litigation, Plaintiff has adequately set forth a short and plain statement of the claim showing that she is entitled to relief on her WPA claim.”
As for the charge that Jones and Clendinen tortiously interfered with her contract, Brady said “inferences may be drawn” that they “acted in their own personal interests, inconsistent with and outside the scope of their positions as officers of VIHFA. In that light, the individual Defendants are not shielded by their executive positions with VIHFA,” and thus he would not dismiss the count “at this stage of the litigation.”
While the defendants argued that the defamation count should be dismissed because it lacks specificity, and because it concerned internal communications, Brady wrote that the “lack of specific allegations setting out in the initial pleading who made what substantive statements to whom, and when, is not fatal to the Complaint at this stage, as this information will no doubt be obtained in the first round of discovery.”
Concerning the breach of contract charge, which VIHFA disputes because Berry was an “at-will” employee, Brady said that viewing the allegations “liberally in the light most favorable to Plaintiff, an inference may be drawn that Plaintiff’s COO position included specified obligations and duties on both employer and employee as opposed to an undefined, casual at-will relationship without interest in any continuing employment from which either party could walk away without notice or process.”
The opposing perspectives “raise factual questions not ripe for resolution at the pleading stage,” the judge wrote in denying the VIHFA’s motion to dismiss that claim.
Rather, Brady ordered that the defendants file their responsive pleadings to the case within 21 days, and further that the parties meet and confer and, within 45 days, report to the court on five matters.
Specifically, they are: the nature and basis of the claims of Berry and the defenses of the defendants; the possibilities for promptly settling or otherwise resolving the case; making or supplementing the disclosures, or making specific arrangements for the disclosures; any issue relating to preservation of discoverable information; and development of a proposed discovery plan.
The VIHFA, Jones and Clendinen are represented by Shari N. D’Andrade and Christopher Allen Kroblin of Kellerhals Ferguson Kroblin PLLC. Berry is represented by Lee J. Rohn of Lee J. Rohn and Associates, LLC.
